Adam Gonnerman

11 November 2013Book Review: They Don't Speak Spanish In BrazilEarlier this year I heard about "They Don't Speak Spanish In Brazil" through a podcast. Tom Reaoch, host of "Talk2Brazil," interviewed the book's husband & wife co-authors. It sounded like an informative book, especially coming from an American who had worked extensively in Brazil as well as from a Brazilian tax lawyer. Despite the nearly $19 price tag for the Kindle edition, I bought a copy. Once I eventually started reading it, I found it hard to put down.This isn't a book that tells a story directly, but it does tell a story. It's not so much the personal story of Joseph Low and Claudia Brito Low, although they met in Brazil and share anecdotes from doing business there, but really more the story of a unique nation with a vibrant economy and a very challenging business environment.There are a few main points that I took away from this very worthwhile book. Although I share only a handful of quotes here, I highlighted the text extensively and even bookmarked (something I practically never do) the section on worker rights.First, Brazil holds promise."You don't have to go to war against established companies or entrenched industries to carve out a niche for your company. You simply need to be diligent, be prepared, and ready yourself to work hard. There are acres of diamonds just waiting to be found."Brazil is an "emerging market," the "B" in BRICS. Although there is some question about when the bubble will burst, there's no doubt that the market in Brazil is huge and people will continue demanding goods and services. More and more Brazilians are getting online, many even skipping the desktop revolution and going straight to smartphones. This all being the case, a determined entrepreneur can do well simply adapting tech solutions from other world markets to the scenario in Brazil.That said, one must be careful to understand the following point.Second, Brazil is unique."What works in France might work in Belgium. What works in Argentina might work in Chile. But what works elsewhere in the Americas will not work in Brazil."Even though I was raised on a farm in northeast Missouri, I grew up aware of other cultures and nations as well as world events. The area where I grew up was not culturally diverse, but my parents were well-informed. My dad watched the nightly news every day, and often I watched with him. We had a subscription to the National Geographic, we used our local library to the fullest extent possible, and I had overseas penpals for years. Yet, when I went to Brazil the first time in 1997 at age 21, I was mildly and pleasantly surprised by one thing: U.S. culture did not overshadow Brazilian culture.Somehow I had simply assumed that the entire Western hemisphere existed in the cultural and economic shadow of the United States, and surely some would argue that this is the case. There are many multinational brands present in the country. Coca-Cola is certainly easy to find. Still, the language, music, mannerisms, laws...everything, is truly Brazilian. Further, even though it's a nation in "Latin America," it is not a "Latin American nation.""Brazil is Brazil. Nothing more, nothing less, and nothing else. Your company's experience in Mexico, the Dominican Republic, and Colombia simply does not apply. You can't pretend Brazilians are just Argentines who speak Portuguese. Brazil is a country and a culture unto itself. The sooner you grasp that, the easier your learning curve will be."Third, Brazil is huge.When I was raising support in my younger years for mission work in Brazil, I always took a large map of Brazil with me to visit churches. I'd unfold it to show to people, and invariably someone would realize the country takes up much of South America, gasping "I never knew Brazil was so large!"Often the same person would ask if I was learning Spanish because of my Brazil connection. Seriously. People in the United States just really don't know much about the 5th largest nation (in terms of geography and population) in the world.Consider the following:"The GNP of the state of São Paulo is greater than the combined economies of Argentina and Chile. And it makes some sense: São Paulo state has more people than the entire country of Argentina—about a million more.""São Paulo state has more people than the entire country of Argentina—about a million more."We are talking about a nation with extensive physical territory (3,287,597 square miles compared to the United States with 3,794,101 square miles) and a large population (201,032,714 compared to the U.S. which has 317,042,000). The cities are densely populated, and there are vast tracts of forest and farmland between the cities. "Mexico and the Dominican Republic have adapted themselves to doing business the foreigner's way, whereas in Brazil the foreigner has to adapt himself to doing it the Brazilian way. And considering the size and scope of the market, Brazil can afford to have this attitude."Fourth, Brazil has corruption."I cannot count how many times I've heard the sentiment, "I have a friend with influence in the government." Don't allow yourself to be suckered in. Bribing government officials is like dealing heroin to a heroin addict: it never ends."People who know little else about Brazil know that this country has a problem with corruption. Many countries have the same sort of problem, and it's little wonder that Brazil suffers with it considering its history of exploitation rather than proper colonization. Brazilians with a high school education can tell you all about it. That being the case, it's a mistake to participate in corruption, and I really appreciate the advice given in this book on the topic."If you get a bad feeling in your stomach, always do the right thing. Don't fall prey to the notion that this is just how things are done. Taking the right avenue may take longer. But even if it takes months to get the paperwork to begin manufacturing your product, to open your store, to get your tax identification number, or whatever, take your time and do it right. Otherwise, in two years that same guy that cut you 'the favor' is still going to be at your neck, still looking over your shoulder to say, 'Hey, what have you done for me lately?' You don't want to put yourself and your company in that position."If you are going to Brazil to do business, do it right, even if it's the hard way. Thinking that this is just the way things are done will hook you and eventually come back to haunt you. Brazil may have a problem with corruption, but it is also a nation of laws."You can only sleep well at night if you know things were done the right way from the start. If there were a legal case and you were to be prosecuted, remember: as a foreigner you'll be subjected to less leniency and more scrutiny by the court. When you're under the microscope, you want to be sure you don't have anything to hide."Fifth, Brazil is bureaucratic.The temptation to give in to corruption, as well as the conditions that allow it to flourish, is Brazil's labyrinthine bureaucracy. Seriously, very little in this country is easy to do from a paperwork perspective. For example, to marry my wife, a Brazilian citizen, in Brazil I had to go through the following process:Gather extensive documentation, including a clean police record as well as my birth certificate and other vital documents.Have all documents notarized.Have all notarized documents certified as properly notified by my state's Secretary of State office.Send all duly notarized and certified documents to the Brazilian consulate in the area where I lived to be authenticated.Send all notarized, certified, authenticated documents to a legal translator in Brazil for full translation to Portuguese.Have my fiancée file all the paperwork with the registry office where we would be married. This entire process cost over US$500, but I figured it was still cheaper than paying to bring her to the U.S. for marriage. However, marriage in my home state would have been a far simpler, and cheaper, matter. All we would have needed were our passports, a small fee (less than US$50 at the time) and a form properly signed and submitted. After a three day wait our license would have been ready.I said it before, and I'll say it again: Brazil is bureaucratic."Fully 40% of new Brazilian start-ups don't survive more than two years due, in part, to the complexity of tax and legal compliance, regulations, and sheer amount of paperwork, according to Brazil's primary government research agency, the IBGE."Still unconvinced? Try this:"A World Bank study concluded that, on average, it takes 13 procedures and 119 days to start a new business in Brazil—17 procedures and 469 days for construction projects."Sixth and finally, Brazil is a challengeAfter all I've said, it may seem like I'm disparaging Brazil. Far from it! I love the country, and I appreciate Joseph Low's comments on the matter."Cláudia often says it's very, very easy to blame Brazil for your own inadequacies. If you want to succeed in Brazil—and believe me, you want the Brazilian market—then you cannot blame your ignorance, laziness, or lack of follow-up on the 'Brazilian bogeyman.'"Brazil is a dynamic, energetic, perplexing and beautiful place. If you want to play ball (soccer, in this case), with any level of success, you have to be determined, keep in clean and work hard."Think of it in terms of a poker game. The Brazilian government is the dealer and they will always—always—have all the cards. If you want a seat at the table, you have to play by their rules and pay the buy in. If you're going to stay, you have to commit. Brazil—love it or leave it."I highly recommend "They Don't Speak Spanish in Brazil" to anyone interested in Brazil, but particularly for those considering doing business there.

Mark Langevin - Brazilworks

Book Review: They Don’t Speak Spanish in Brazil November 14, 2013 | Brazil cross-cultural education | Brazilian taxation | doing business in Brazil | Joseph H. Low III and Claudia Brito Low They Don’t Speak Spanish in Brazil: A Guide to Life, Management, and Taxes for Doing Business in Brazil By Joseph H. Low III and Cláudia Brito LowThe Don’t Speak Spanish in Brazil is really two books in one, and both are worth the read for different reasons. The first eight chapters are really a cross-cultural guide to understanding and appreciating Brazil while sidestepping some of its apparent disadvantages. Chapters nine through sixteen along with the appendix and glossary is a well-written second book, more serious than the first, but a readable guide to those exploring the possibility of doing business in Brazil. Both are worth the read, but it is the second that distinguishes They Don’t Speak Spanish in Brazil from a growing list of “brazil for beginners” type of books and business guides.In 1987 when I first travelled to Brazil, many in my family assumed that Brazilians spoke Spanish as the authors imply. Today, more and more North Americans know more about Brazil than my parents did, and U.S. citizens are now the second largest group of foreign nationals that travel to Brazil, next to the Argentines. So, while this book’s title may no longer apply to most readers in English, the thoughtful explanations, vivid reportings, and insightful teachings more than make up for the old school title.The book is a long brew of all the complicated ingredients that make up what all of us experience as Brazil. Yet, the authors pull together their experience and insight in chapter one to provide in a nutshell what they then go on to crack open in the following pages and chapters,“Think of it in terms of a poker game. The Brazilian government is the dealer and they will always-always-have all the cards. If you want a seat at the table, you have to play by their rules and pay the buy in. If you’re going to stay, you have to commit.”It is this insight and entertaining explanation of experience that makes the first book in They Don’t Speak Spanish in Brazil a fast read, especially for those already planning their trip to one of Brazil’s distinct destinations-like my favorite Ouro Preto in Minas Gerais. This first book works as a collage of the authors’ experiences woven through their cross-cultural sensitivity; and the methodology is as refreshing as an iced caipirinha on a blistering hot day in Cuiabá where I often work. The authors draw a conclusion about Brazil and then tell a story or two to deliver it up to their readers in the most quenching way. For example, on page 41 the Lows explain,“But here’s the more cultural point: nobody—and I mean nobody-eats lunch at their workstation. A desk and lunch is to a Brazilian what oil and water are to each other—they don’t mix. Let me relate a story that shows you how important this lesson is.”I won’t recount the story, but I recommend that you do because it reveals some of the fundamental cultural differences that distinguish Brazilians from North Americans, but in a way that invites adventure and eases the cross-cultural submersion into the delight that Brazil can be.The Lows certainly highlight the best of Brazil, but don’t shy away from the ugly side either. They note that Brazil does have a lot of crime, and much of it is horrifyingly violent. Rather than simply dismissing crime or damning Brazil, the Lows report and then recommend,“the police note that theives target trade shows, expos, convention centers, and the like because there are plenty of naïve, distracted foreigners carrying laptop bags and presentation equipment. The answer isn’t to avoid the expo altogether. You should take proper precautions. Don’t travel by yourself. Be vigilant about your surroundings. Don’t go into dark alleys. Stay in well-lit areas. Do your best not to appear too much like the tourist you actually are.”Yes, the first book-the first eight chapters offer a great deal of insight and experience nicely packaged like one of Brazil’s giant chocolate easter eggs made for children and the sweet toothed adult-wow that even works as a metaphor for Brazil too!The second book, chapters nine through sixteen, are the most readable treatise on Brazilian taxation and corporate structure that I have come across in past years. There are dozens of guides on Brazilian taxation, from KPMG to Ernst and Young, but They Don’t Speak Spanish in Brazil is the only one that doesn’t require a tank of coffee or an afternoon nap to get through, seriously! First off, the chapters are focused, well framed and essentially short… a key to high readability on anything that relates to taxation—especially in Brazil where it can get downright complex and confusing even for a tax professional. I recommend this second book, this collection of chapters to those executives I work with that need to know, but won’t fall asleep trying to understand the decisions they need to make to work in Brazil. So, for those of you have placed Brazilian taxation and corporate structure on your reading list, but are procrastinating; wait no longer.Lastly, don’t just skim over the appendix and glossary, these are valuable tools for all of us, even the most experienced brazilianist can learn a thing or two from an appendix that spells out the major business incentives in every state of Brazil’s federated union as well as the glossary of terms-a concise short cut to weaving your way through the myraid of acronyms and terms that any Brazilian business must navigate.Even if you’re an experienced traveler to Brazil, or often pass through São Paulo for a meeting or two, the book is worth the read; yes you may occasionally disagree with the author’s conclusions taken from their own experiences as reported in the first eight chapters. For example, on page 88 the authors state the claim that Brazilians “turn off” during holidays and paid time off. Yes, most Brazilians do and for all the right reasons, but Brazilian business people do not always disengage… they all have smart phones and skype, so if you are engaged in a business transaction or activity; don’t be surprized to find your Brazilian counterpart trying to skype you over a matter of business while he or she is on the beach in Guarapari or trading e-mails with you in the airport waiting for a flight to Orlando. Brazilian business folks now speak English and often know more about ourselves as North Americans than any of us would care to admit. So read They Don’t Speak Spanish in Brazil, you will learn a lot about Brazil and yourself; a credit to the authors and their subject.

Insights on information about taxes and regulations when doing business in Brazil. A must read!

September 21, 2014 - Ms. Claudia Low is the co-author of the book “They Don’t Speak Spanish in Brazil,” which provides a complete insight on how to do business in Brazil, in the cultural, economic, tax and regulations and legal aspects – along with providing very useful information for you to know before you seek your business opportunities in Brazil. Cláudia Brito Low, a Brazilian bar (Ordem dos Advogados do Brasil – Sao Paulo ) registered attorney who is internationally recognized for being an expert in the field of Brazilian taxation. Claudia Low joined Kafuman Rossin in 2014 as a manager in the tax department. She provides a variety of tax planning and compliance services for high-net worth individuals and privately held businesses. Her experience includes the development and implementation of tax planning strategies for both domestic and cross-bordering international transactions. She also works in the international consulting department at Kaufman, Rossin & Co. We asked Claudia Low questions about the tax and regulation information needed for foreign businesses to know before seeking to enter the Brazilian market. Below are her very informative answers. 1. Many foreigners don’t understand how business in Brazil works, especially relating to taxes and regulations. How is the structure of the Brazilian tax and legal system different from other regimes that foreign businesses might be more familiar with? When it comes to Brazil, most of my clients immediately are surprised with the number of taxes imposed in one transaction. In addition, the tax calculation is of course dependent on the specific tax regime and associated transaction – i.e export, import, or domestic transaction. While other countries do have VATs (value added taxes) and many are familiar with the mechanics of offsetting current VAT with VAT credits imposed on purchases related to the final product, the mind blowing part specific to Brazil is that the VAT rates not only vary per state (which in Brazil would be 26 states and one DF), but also per product, and by the destination or location of the purchaser. Non-Brazilians too are normally shocked when presented with the depth of state and federal incentives available to them and their enterprises or planned entities in Brazil. Or, in other words, many people are “sold” on the cities of São Paulo or Rio de Janeiro being the only options for their business entity in Brazil. This is understandable as São Paulo traditionally is the main (and often times only) municipality non-Brazilians will visit on business related trips. 2. What are some of your strategies for helping foreign businesses and investors become comfortable with the Brazilian regulatory regime and position themselves for success? First, I would recommend that they understand their responsibilities as a foreign national doing business in Brazil. Be fully aware that if you establish a presence in Brazil, you could be treated as a Brazilian taxpayer and ultimately be responsible for a chain of tax and regulatory compliance laws. For example, I often times witness a foreign entity hiring a person in Brazil to be their representative or agent. That’s fine. No problem. However, all proper documentation and caution must be taken so this structure is not ultimately treated as an employer-employee type of relationship in which payroll obligations would be required of the entity in Brazil. If you are selling to Brazil and taxes are being withheld from your Brazilian customer on your behalf, ask for the withholding certificate of taxes. This way you will clearly establish the responsible party for the tax payment and might be able to even credit back some of the taxes paid in Brazil on your foreign tax returns. 3. What are the biggest challenges facing companies looking to enter the Brazilian market and what are some examples of strategies to overcome them? Basic knowledge of Brazil (economy, culture..), the Brazilian market (Brazil is not only Rio and São Paulo…), and a basic level understanding of Portuguese. Portuguese is the language spoken in Brazil – not Spanish, and, unfortunately, not as much English as many visitors mistakenly presume. 4. They might not be well-known, but what are some of the benefits of the Brazilian tax and legal system, and are there ways for foreign businesses and investors to take advantage? There are numerous incentives provided by cities, states and by the federal government. Most of the incentives require a financial investment or a certain number of increase in jobs for the location. The incentives might vary between reduction of tax rate, funds or governmental grants, to the deferral of tax payments and even the concession of land or property to run your business. Most of the municipalities, states and federal governmental sites will provide information on the incentives available and how to apply for them. 5. What advice would you give to companies who are looking to expand into Brazil but are unsure of where to start? The opportunity is there, but you need to work with those who not only know, but those who are honest and willing to roll up their sleeves via hard work on your behalf. 6. How important is it to have local legal representation and local partners who are well versed in helping foreign businesses and investors achieve success in Brazil? Legal representation or local partners are not immediately needed for studying a business opportunity there. However, after doing their proper due diligence outside of Brazil, I do recommend they make certain to eventually speak with bar registered attorneys in Brazil and individuals with whom they truly can communicate – i.e solidly fluent English.